Pilot Testing of Initial Electronic Prescribing Standards Cooperative Agreements Required Under Section 1860D-(4) (e) of the Social Security Act as

Pilot Testing of Initial Electronic Prescribing Standards Cooperative Agreements Required Under Section 1860D-(4) (e) of the Social Security Act as Amended by the Medicare Prescription Drug, Improvement, and Modernization Action (MMA) of 2003 Michael O. Leavitt Secretary of Health and Human Services 2007

Table of Contents Executive Summary Section I Introduction 1. Background 2. Statutory Requirements 3. E-prescribing Standards and NCVHS 4. Regulatory Requirements Section II Pilot Testing of Standards 1. Testing Criteria 2. Grantee/Contractor Selections 3. Overview of Grantees /Contractor Pilot Site Tests A. Achieve Healthcare Information Technologies, LLP B. Brigham and Women s Hospital C. RAND D. SureScripts LLC E University Hospitals Health System Section III Evaluation 1. Evaluation Contractor 2. Evaluation Objectives 3. Research Questions A. Functionality B. Outcomes and Impacts 4. Data Collection Activities A. Review of Grantees/Contractor Documents B. Structured Telephone Calls with Key Grantee/Contractor Staff C. Grantee/Contractor Site Visits D. Key Informant Interviews 5. Data Analysis Section IV Evaluation Findings 1. Pilot Testing of the Standards 2. Results and Analysis of Standards Testing A. Formulary and Benefits B. Medication History C. Fill Status Notification D. Prior Authorization E. Structured and Codified SIG F. RxNorm G. Long-Term Care 2

Section V Additional Information: Business Process and Return on Investment (ROI) 1. Overview A. Workflow B. Prescriber Utilization of E-prescribing C. Physician Uptake D. Patient Satisfaction E. Formulary Versus Generic Prescribing F. Medication History Utilization G. Inappropriate Prescribing/Adverse Drug Events H. Callbacks 2. Conclusions Appendices Glossary Electronic Prescribing Terminology Discussed Throughout the Report References 3

EXECUTIVE SUMMARY The current system of prescribing and dispensing medications in the United States has widespread problems with safety and efficiency. Experts predict that a shift to electronic prescribing (e-prescribing) systems could avoid more than 2 million adverse drug events annually, of which 130,000 are life-threatening 1. E-prescribing also has enormous potential to create savings in health care costs, through reduction of adverse drug events and in improved workflows. One recent study estimated the potential savings at $27 billion per year in the United States 2. However, adoption of e-prescribing technology remains limited. The inability of multiple systems to share information effectively, and the lack of a standard format and vocabulary, reduces the effectiveness and attractiveness of using an electronic system. Because of e-prescribing s potential to reduce errors and costs, Congress mandated the establishment of standards for the electronic transmission of prescriptions and certain other information for covered Part D drugs prescribed for Part D eligible individuals in the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. Although prescribers are not required to write prescriptions electronically, if they do, they must utilize the adopted e- prescribing standards. Prescription Drug Plan (PDP) sponsors, Medicare Advantage (MA) Organizations offering Medicare Advantage-Prescription Drug (MA-PD) plans and other Part D sponsors must support and comply with electronic prescribing standards when communicating with prescribers who want to use e-prescribing technology. Furthermore, dispensing and nondispensing pharmacists who electronically transmit prescription and certain other information for covered drugs prescribed for Medicare Part D eligible individuals are also required to use the adopted final e-prescribing standards. The standards are to be selected to achieve several goals: To the extent practicable, the standards would not impose undue administrative burdens on prescribing healthcare professionals and dispensing pharmacies and pharmacists; The selected standards would be compatible with the standards established under Part C of Title XI and section 1860D-4(b)(2)(B)(i) of the Social Security Act, and with general health information technology standards; and The standards would permit the electronic exchange of drug labeling and drug listing information maintained by the Food and Drug Administration (FDA) and National Library of Medicine (NLM). With input from the National Committee on Vital and Health Statistics (NCVHS), the Department of Health and Human Services (HHS) identified and adopted three e-prescribing standards that met the criteria for adequate industry experience ( foundation standards) for use as Medicare Part D e-prescribing standards effective January 1, 2006. In addition, HHS has recognized six initial standards that might, pending confirmation from pilot testing, be suitable for adoption as additional final e-prescribing standards. HHS selected five pilot sites to test these initial standards in its pilot project. The pilot sites were set up to test the initial standards themselves (to ensure that they communicated the intended information in a clear and unambiguous manner) as well as how the initial standards would interact with each other and the foundation standards (how the initial standards would adapt to specific business practices and whether they would operate efficiently in different work 4

environments, i.e., the clinical and economic outcomes associated with using them to e-prescribe in the Part D context). The Agency for Healthcare Research and Quality s (AHRQ) National Resource Center for Health Information Technology (NRC) then evaluated the pilot sites efforts, and summarized and synthesized findings across the pilot project. Pilot Site Characteristics Each site selected for the pilot project held the potential to produce special information for the government based on the standards they tested, methodologies used and context in which e-prescribing was implemented or assessed. RAND focused on New Jersey physicians in an e-prescribing program sponsored by Horizon Blue Cross/Blue Shield of New Jersey. Brigham and Women s Hospital (BWH) worked in an academic medical systems setting with physicians from the CareGroup Health System in Boston. Achieve, the largest information technology vendor for the long term care (LTC) industry, conducted a pilot site study implementing e-prescribing in facilities that had never before used this technology. University Hospitals Health System and Ohio KePRO, the Quality Improvement Organization in Ohio, teamed up to study the implementation of the standards in 300 primary and specialty care physician offices. SureScripts, the nation s largest provider of electronic prescribing networking and certification services, worked with physician offices in five states. Findings from Standards Testing Even in the case of standards that are technically mature, implementation issues will always exist. The testing of the initial standards conducted by the pilot project reflects this assumption. The evaluation of the pilot sites results in the context of their characteristics and testing methods yielded the following findings: 5

Exhibit 1: Summary of Initial Standards and Testing Summary/Results Name Standard Description Standards Testing Summary/Results Initial Standards Formulary and benefit information National Council for Prescription Drug Programs (NCPDP) Formulary and Benefit Standard Version 1.0 Displays the formulary status and alternative drugs as well as co-pays and other status information. NCPDP has developed a standard using RxHub protocol. Determine if the standard developed by NCPDP using RxHub protocol should be adopted as a standard. Analysis shows that this standard is technically able to convey the information needed to support this function for use in Part D. Exchange of medication history NCPDP SCRIPT Version 8.1 Includes the status, provider, patient, coordination of benefit, request, and response segments of SCRIPT. Determine readiness of the NCPDP's standard medication history message. Analysis shows that this standard is technically able to convey the information needed to support this function for use in Part D. Fill status notification NCPDP SCRIPT Version 8.1 Informs when Rx is filled, not filled, or partially filled. Includes provider, patient and drug segments of SCRIPT message. Not yet generally used. Assess its business value and clinical utility. Analysis shows that this standard is technically able to convey the information needed to support this function for use in Part D. Structured and Codified SIG NCPDP SCRIPT Version 8.1 Clinical drug terminology (RxNorm) Indication, dose, dose calculation, dose restriction, route, frequency, interval, site, administration time and duration, and stop order instructions. A clinical drug nomenclature that provides standard names for clinical drugs and for dose forms as administered. It also provides links from clinical drugs to their active ingredients, drug components, and most related brand names. Test a standard structured code set for expressing patient instructions developed through standards development organization efforts. Analysis shows that, in its current state, this standard is technically unable to convey the information needed to support this function for use in Part D Determine whether RxNorm terminology translates to National Drug Codes (NDCs) for new prescriptions, renewals and changes. Analysis shows that, in its current state, this standard is technically unable to convey the information needed to support this function for use in Part D. Prior authorization messages ASC X12N 278, Version 4010A1 and ASC X12N 275, Version 4010 w/hl7 Requires header information, requester, subscriber, utilization management, and other relevant information for prior authorization requests. Determine functionality of new versions of the ASC X12N 278. Analysis shows that, in its current state, this standard is technically unable to convey the information needed to support this function for use in Part D. 6

Long-Term Care. In addition, the Achieve long-term care pilot site focused on whether e-prescribing in general could be successfully implemented in a long-term care setting, given its unique needs and workflows. Analysis shows that e-prescribing can be supported, with some technical accommodations to the standards, in long-term care facilities for Part D implementation. In testing the functionality of e-prescribing standards, the grantees/contractor also tracked various outcomes of e-prescribing in the pilot project. These included: Workflow direct computer to computer transmission and improved connectivity to e- prescribing networks and communication with outside entities improves workflow for both prescribers and pharmacists Prescriber Utilization of E-Prescribing office staff plays a significant role in e- prescribing, particularly in the long-term care setting. Physician Uptake adoption rates/retention were reasonable and, barring technical problems related to electronic devices and incomplete patient data, retention was generally good. Patient Satisfaction there was limited pilot site experience in this area, but of the small sample surveyed, adults under 65 years of age preferred e-prescribing over paper. Formulary Versus Generic Prescribing the role of e-prescribing in the use of onformulary medication and generics is still very preliminary, with prescribers uncertain about the accuracy and completeness of formulary information. Medication History Utilization providers may have been unaware of the availability of this function, and comments ranged from a perception of medication history as inaccurate, to those who viewed it as a good supplement to patient self-reporting. Inappropriate Prescribing/Adverse Drug Events data may demonstrate a potential decrease in medication errors, with many respondents indicating they overrode drug-drug interactions at least sometimes. Callbacks anecdotes indicate that especially in long-term care, callbacks were dramatically reduced but in another pilot site s survey, no significant differences were noted. Ultimately, the impact of e-prescribing will depend on adoption by prescribers themselves. A copy of the full pilot project evaluation report can be accessed at http://healthit.ahrq.gov/erxpilots 1. Background 7 SECTION I INTRODUCTION Efforts to modernize the American health care system have accelerated over the last five years due to several landmark studies revealing the toll of medication errors. In 1999, the Institute of Medicine (IOM) estimated that as many as 7,000 people died each year from medication errors alone, accounting for 1 out of 131 ambulatory deaths. 3 Another study by the Center for Information Technology Leadership showed that 8.8 million adverse drug events (ADEs) occur each year in ambulatory care. In hospitals, the average patient is subject to at least one medication error per day. 4 This study also revealed that fully one quarter, or 3 million, of these errors were preventable. 5

According to CMS in its proposed rule (Federal Register 2005; 42 CFR Part 423: 6260), preventable ADEs occurring in hospitals cost the American health care system $3.5 billion per year. Testimony before the National Committee on Vital and Health Statistics (NCVHS) indicates that ADEs in ambulatory settings amount to upwards of $887 million. Aside from the significant problem of illegible handwriting, the current paper-based system for recording and communicating drug prescriptions in the United States is a poor medium of communication and is associated with inefficient workflows. 6 Industry testimony before the NCVHS also indicates that almost 30 percent of prescriptions require pharmacy callbacks, resulting in 900 million prescription-related telephone calls annually. To address these concerns, scholars, health experts, and industry leaders have supported the switch from paper to an electronic system of prescribing. Electronic prescribing, also known as e-prescribing, eliminates incorrect handwriting interpretation, ensures that vital fields include meaningful and relevant data, 7 and is available to the physician at the point of care. Electronic prescribing also enables the delivery of clinical decision support (CDS) 8 including formulary checks, checks for allergies, drug-drug interactions, unusually high doses, and clinical conditions, as well as suggestions for appropriate dosages given the patient s level of renal function and age. In addition, in its final e-prescribing rule (70 FR 67568) CMS noted that experts predict a reduction in errors when physicians send medication orders to pharmacies electronically. All told, e-prescribing can help avoid more than 2 million ADEs annually, of which 130,000 are life-threatening. 9 In terms of monetary savings, e-prescribing has the potential to make a profound impact. In addition to reducing the aforementioned nearly $3.5 billion spent annually on ADEs, e- prescribing could also generate savings by improving providers ability to make more informed decisions about appropriate and cost-effective medications. According to the AHRQ reporting on the Center for Information Technology Leadership, an additional cost savings of $2.7 billion would result from e-prescribing s ability to reduce clinicians phone time. CMS also reports that the e-health Initiative recently estimated that widespread adoption of e-prescribing could save the United States healthcare system $27 billion per year. However, e-prescribing is much more than the simple electronic transmission of a prescription between prescriber and pharmacy. E-prescribing can also enable significant improvements in patient safety, quality of care and cost effectiveness. On a practical level, e- prescribing represents just one part of a complete clinical strategy and at its highest functioning level, e-prescribing solutions form part of a complete medication record, both leveraging and adding to data captured during other clinical processes. Today, prescribers (physicians and others who have authority to write prescriptions) make their prescribing decisions using whatever medical, medication, and eligibility information is known or available to them. Typically, they give a handwritten prescription to the patient or phone or fax it to the dispenser (the patient s pharmacy of choice). Prescribers also may use their computers to send faxes to dispensers either directly or through an e-prescribing network. At the dispensing site, tasks are somewhat more automated. Through internal and external electronic claims, eligibility, and benefits verification processes, the dispensing pharmacist may identify contraindications, lower-cost alternatives, or the need for prior authorization. At any step in the process, the dispenser may need to contact the prescriber by phone for clarification or approval of change. Dispensers also must frequently call the prescriber to obtain approval for refills or renewals where they are not specified on the prescription or when they have run out. 8

Prescribers may not have access to the latest drug information, or lack a complete or accurate medication list or medical history for their patient and, as a result, they can miss potential contraindications or duplicate therapies. Dispensers often have difficulty reading handwritten prescriptions, and frequently have little or no information about the patient s condition for which the prescription is written. Contacting the prescriber by phone to clarify what is ordered and to make changes often results in delays for the patient, and it is timeconsuming for both the prescriber and the dispenser. There are disconnects between the prescriber and patient in the medication process, with little or no feedback to the prescriber on whether a prescription was filled, or what generic substitutions were made. Conversely, electronic prescribing is conducted in one of two ways, either via a handheld device, such as a personal digital assistant (PDA), smart phones or though a web browser on a desktop application. Depending on the e-prescribing application that is chosen by the physician s practice, the patient s demographics might have been downloaded in the physician s database as part of the installation. When the prescriber starts his/her day, information on patients who are scheduled might be loaded in a queue for the prescriber to access. At this time, eligibility checks and medication history could be performed. When the prescriber is ready to prescribe, he/she could have at his/her disposal the patient s formulary information and past medication history. When the prescriber writes a prescription for a patient he/she could bring up the patient file on the e-prescribing application. From there the prescriber could search for the medication to be prescribed or could pick from a list of his/her most commonly prescribed medications. When a medication is selected, formulary and benefits (FB) and drug utilization review (DUR) could be performed. The e-prescribing system could warn the prescriber of any contraindications or alerts with the option to override it or choose another medication. Next, the prescriber could populate the quantity and directions fields, and the number of refills to complete the process. The prescriber could then send the electronic prescription to the patient s pharmacy of choice. This entire process could take less than one minute to perform. Despite growing industry consensus, efforts towards e-prescribing adoption have yielded limited results. According to NCVHS testimony, in any given year physicians write over three billion prescriptions, and 65 percent of Americans take prescription drugs; however, according to industry surveys results provided to the NCVHS, only 5 percent to 18 percent of physicians use e-prescribing. A primary reason cited as to why fewer than 3 percent of all prescriptions are written with integrated e-prescribing systems is the lack of e-prescribing standards. Moreover, NCVHS contends that the few standards that are available often are not published with sufficient precision to be implemented in a way that is truly standard. To realize the most significant benefits of e-prescribing, systems must be able to function across key steps in the drug delivery chain from writing prescriptions, to dispensing drugs, to payment. Currently, stakeholders in this chain have diverse interests and varying technological infrastructures. Physician prescribers, pharmacy dispensers and the various Part D sponsors Prescription Drug Plan (PDP) sponsors and Medicare Advantage (MA) organizations offering Medicare Advantage-Prescription Drug (MA-PD) plans must work together if integrated e- prescribing is to become a reality. Developing the standards that will facilitate e-prescribing is one of the key action items in the federal government s plan to build a nationwide electronic health information infrastructure in the United States. E-prescribing has the potential to drive change in the healthcare industry. 9

Because of e-prescribing s likelihood of reducing medication errors and costs, and enhancing patient safety, Congress legislatively mandated that Medicare Part D plans support an electronic prescription (e-prescribing) program. 2. Statutory Requirements Section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173) amended Title XVIII of the Social Security Act (the Act) to establish the Voluntary Prescription Drug Benefit Program. Included in the provisions of section 1860D-4(e) of the Act is the requirement that the electronic transmission of prescriptions and certain other information for covered Part D drugs prescribed for Part D eligible individuals comply with standards adopted by the Secretary. Medicare Prescription Drug Plan (PDP) sponsors, Medicare Advantage (MA) organizations offering Medicare Advantage-Prescription Drug Plans (MA-PD) and other Part D sponsors are required to support and comply with electronic prescribing standards once they are in effect, including any standards that were in effect when the drug benefit began in 2006. There is no requirement that providers or pharmacies implement e-prescribing. However, providers and pharmacies that electronically transmit prescription and certain other information for covered drugs prescribed for Medicare Part D eligible beneficiaries are required to comply with any applicable final standards that are in effect. The MMA requires the adoption of final standards to support the e-prescribing program described in the MMA. The MMA mandates e-prescribing standards that allow for information exchange, to the extent feasible, on an interactive, real-time basis; and allow for the exchange of information only as it relates to the appropriate prescribing of drugs, including quality assurance measures and systems. The MMA requires that standards for e-prescribing be consistent with the objectives of improving patient safety, quality of care, and efficiencies. The MMA requires standards for conveying: 1. Eligibility and benefits information, including the drugs included in the applicable formulary, and tiered formulary structure, and any requirements for prior authorization. 2. The following information with respect to the prescribing and dispensing of a covered Part D drug: a. information on the drug being prescribed or dispensed and other drugs listed on the medication history, including information on drug-drug interactions, warning or cautions, and when indicated, dosage adjustments; and b. information on the availability of lower cost, therapeutically appropriate alternatives (if any) for the drug prescribed. 3. Information that relates to the medical history concerning an individual and related to a covered Part D drug being prescribed or dispensed, upon request of the professional or pharmacist involved. 10

In addition, the MMA requires design criteria for these standards so that they are compatible with general health information technology standards, permit electronic exchange of drug labeling and drug listing information maintained by the Food and Drug Administration (FDA) and the National Library of Medicine (NLM), and, to the extent practicable, they do not impose an undue administrative burden on the industry. To provide for efficient implementation of the requirements, section 1860D-4(e) of the Act required the Secretary to conduct a pilot project to test initial standards recognized under section 1860D-4(e)(4)(A) of the Act, prior to issuing the final standards in accordance with section 1860D-4(e)(4)(D) of the Act, and provide a report to the Congress by April 1, 2007, on his evaluation of the pilot project. Section 1860D-4(e)(4)(C)(ii) of the Act allows for an exception to the requirement to pilot test initial standards if, after consultation with standards setting organizations (SSOs) and industry users, the Secretary has determined that there already is adequate industry experience for a standard. Any such foundation standards can be proposed and adopted through notice and comment rulemaking as final standards without pilot testing. Section 1860D-4(e) of the Act also requires that the Secretary promulgate final uniform standards by no later than April 1, 2008. 3. E-prescribing Standards and NCVHS The MMA charged the National Committee on Vital and Health Statistics (NCVHS) with developing, in consultation with various named parties, recommendations for uniform standards that would enable electronic prescribing in ambulatory care settings, and promote patient safety and quality health care. The NCVHS held hearings to obtain testimony regarding which standards were needed to support e-prescribing; how MMA requirements were supported or not supported by current standards (i.e., standards gaps and limitations); and any related issues that might affect e-prescribing implementation or acceptance. Standards are the essential building blocks for the widespread adoption of electronic prescribing and other health information technologies (HIT). The standards that have been recognized for e-prescribing under the MMA are published specifications that were developed and/or approved by standard setting organizations (SSOs). These standards establish common vocabulary, content, technical or other specific criteria that serve as a rule, a guideline, or a definition that would promote interoperability amongst users. This concept of interoperability entails various systems successfully inter-communicating with one another through standard mechanisms (i.e., standard transactions ) that convey standardized content (i.e., common data elements and vocabularies). Such standards, combined with a real time and secure network, would ensure that providers have instant, secure access to accurate and timely patient information through an electronic health record or similar application. The result would be the ability to coordinate and monitor patient care across different providers. Collecting and transmitting patient data is a complex process. The data elements and transmission specifications must match at both the source and destination computer systems, which is only achievable with adherence to the same standards. From expert testimony, the NCVHS determined that standards needed to be identified for basic prescribing functions between a prescriber and pharmacy; to support eligibility verifications (including individual formularies); and for decision support functionality (e.g., drug utilization review functions), while identifying standards gaps and limitations in all of these 11

instances. The NCVHS identified three types of e-prescribing standards as necessary to support electronic prescribing. They are: message format standards that provide communication protocols and data content requirements (including those that support medication decision making); terminologies to ensure data comparability and interoperability; and unique identifiers for all relevant entities within the e-prescribing process. The NCVHS held hearings and industry participants debated the criteria for immediate adoption as well as whether specific standards should be recommended as foundation standards. That recommended criteria included that the standard was from a standard setting organization that was accredited by the American National Standards Institute (ANSI); that the standard generally has been implemented by entities to which the final standard will be applied in multiple e-prescribing programs with more than one external health care partner; and that the standard is recognized by key industry stakeholders as the industry standard. Three standards met these criteria and were recommended by the NCVHS for adoption as foundation standards for the new Part D requirement. 4. Regulatory Requirements After reviewing the NCVHS recommendations, the Secretary concurred with NCVHS conclusion that the three standards recommended as having had adequate industry experience could in fact be adopted as final standards through notice and comment rulemaking without pilot testing. These standards were called foundation standards, because while they do not support the full range of e-prescribing functionality, they are a base onto which other standards can be built. 12 The proposed foundation standards were: The NCPDP Telecommunications Standard Version 5, Release 1 and the NCPDP Batch Standard Batch Implementation Guide Version 1.1 for eligibility communications between retail pharmacy dispensers and Part D sponsors. The Accredited Standards Committee (ASC) X12N 270/271 Version 4010 and Addenda to Version 4010 for eligibility communications between prescribers and Part D sponsors. The NCPDP SCRIPT Standard Version 5, Release 0 for exchanging new prescriptions, changes, renewals, cancellations and certain other transactions between prescribers and dispensers. Formulary representation and medication history standards, if certain conditions were met and the identified standards had adequate industry experience. Public comments supported adoption of the first three standards, and HHS published a final rule on November 7, 2005 (70 FR 67568) adopting them, effective January 1, 2006, when the Part D benefit took effect. This rule also established a streamlined process for updating adopted standards by identifying backward compatible, later versions of the standards that were not also HIPAA standards. Use of such subsequent versions of an adopted standard would be voluntary. Subsequent industry input indicated that the adopted SCRIPT standard, Version 5.0, should be updated with a later version of the standard (Version 8, Release 1). Using the streamlined process, HHS published an Interim Final Rule on June 23, 2006 (71 FR 36020) updating the adopted SCRIPT standard, thereby permitting either version to be used. SECTION II PILOT TESTING OF STANDARDS The MMA called for a pilot project to evaluate the interoperability potential of initial e- prescribing standards prior to promulgation of the final uniform standards. To fulfill this

requirement, the Secretary selected (based on NCVHS input) six initial standards (see Exhibit 1) to be tested during calendar year 2006. This was accomplished under four cooperative agreements and one contract entered into by the Agency for Healthcare Research and Quality (AHRQ), on behalf of the Centers for Medicare & Medicaid Services (CMS). Details of the scope of the pilot testing were publicized in a Request for Application for the pilot project announced on September 14, 2005. (Available through www.grants.nih.gov/grants/guide/rfafiles/rfa-hs-06-001.html) 1. Testing Criteria During 2006, the initial standards were tested in five sites (Exhibit 2), in a variety of settings to determine whether they were ready for broad adoption. The grantees/contractor were asked to determine whether the initial standards allowed participants to effectively and unequivocally communicate the necessary information among all participants in the transactions, such as the pharmacy, pharmacy benefits manager (PBM), router, plan and prescriber. They also were asked to explore how the initial standards worked with the three foundation standards. Pilot sites also tracked generally anticipated e-prescribing outcomes, such as a reduction in medical errors. Specifically, they were asked to address the following questions: Are the right data being sent? Are the data usable and accurate? Are the data well-understood at all points of the transaction? Are all the initial e-prescribing data communications standards included in the pilot project working? Can they effectively and unequivocally communicate the necessary information from sender to receiver to support electronic prescribing functions? Are the data for the patient and the prescription transmitted accurately among all participants in the transaction, such as the pharmacy, pharmacy benefits manager (PBM), router, plan and prescriber? Did the initial standards work well together, and with the foundation standards? If not, why not and what workarounds were used? How can the initial standards be improved to address workarounds? How long did it take to conduct each transaction using the initial standards? Can all appropriate drugs and other therapies be ordered via electronic prescribing? 2. Grantee/Contractor Selections Exhibit 2 details the names of the organizations selected as the four pilot site grantees/one contractor and the titles of their respective parts of the pilot project. Exhibit 2. Grantee/Contractor Project Titles for Electronic Prescribing Pilot Project 13 Organization Name Achieve Healthcare Information Technologies, LP (LTC) Project Name LTC E-prescribing Standards Pilot Site Study Brigham and Women s Hospital Electronic Prescribing Using a Community Utility: The e- Prescribing Gateway Ohio KePRO* RAND Corporation SureScripts, LLC A Practice-Based Pilot Site Test of Emerging E-prescribing Standards Test of Medicare s Initial Electronic Prescribing Standards in the New Jersey E-prescribing Action Coalition Maximizing the Effectiveness of E-prescribing Between

Physicians and Community Pharmacies * Ohio KePro, the Ohio Quality Improvement Organization (QIO) was technically a contractor who competed for and was awarded a grant through the RFA process. For purposes of this document, they are collectively referred to as grantees/contractor. One of the strengths of the pilot testing was the diversity and uniqueness of the five grantees/contractor. Grantees/contractor represented the spectrum of communities involved with e-prescribing, including most practice settings, and focused on utilization by pharmacists, physicians, nurses, medical assistants, and technology vendors. Grantee/contractor applications were considered based on specific characteristics/criteria which included but was not limited to: the applicants research designs and methods nature of the prescribing pool, specialty, size of practice and percent participation geographic diversity of sites and locations proposed data collection and analysis outcomes reporting, including use of on-formulary medications and generics medication errors and adverse drug events workflow changes prescriber uptake and dropout changes in new, renewal and in-fill status rates use of Food and Drug Administration/National Library of Medicine (FDA/NLM) structured product labeling for electronic drug information applications that included both intervention and control sites; public/private partnerships; and practice-based research networks. Each pilot site focused on different perspectives on the functionality and impact of initial standards by evaluating them on different sectors of the healthcare system, different geographies, and different practice settings using different technology application vendors, pharmacies and other stakeholders in the e-prescribing industry (Exhibit 3). 14

Exhibit 3. Settings and Stakeholders Included in Pilot Site Tests Achieve LTC Brigham & Women s Ohio KePRO RAND SureScripts Settings 1-2 physician offices yes yes yes yes Small offices yes yes yes yes Larger offices yes yes yes yes Academic clinics yes yes yes Long term care Stakeholders yes Prescribers yes yes yes yes yes Pharmacists yes yes yes yes yes Patients yes yes RNs yes yes Technology Vendors yes yes yes yes yes Medical Assistants Others Licensed Practical Nurses/Nurse Practitioners/Physician Assistants yes yes yes 3. Overview of Grantees /Contractor Pilot Site Tests 15 A. Achieve Healthcare Information Technologies, LLP LTC E-prescribing Standards Pilot Site Principal Investigator: Michael Bordelon, Vice President of Research and Development, Achieve Healthcare Only pilot site focused on e-prescribing standards in a long-term care setting. Partnered with Minnesota s Benedictine Health System (BHS), Preferred Choice Pharmacy (LTC pharmacy) and RNA, a planning management system software vendor. Additional partners included Prime Therapeutics; Blue Cross Blue Shield of Minnesota; the State of Minnesota s Medicaid Program; and RxHub. Provided perspective on unique e-prescribing standards and workflow within LTC facilities. B. Brigham and Women s Hospital Electronic Prescribing Using a Community Utility: The E-prescribing Gateway Principal Investigator: Jeffrey M. Rothschild, M.D., M.P.H., Brigham and Women s Hospital Partnered with prescribers, dispensers, and pharmacy plans and payers. Physician prescribers were drawn from CareGroup Health System, a physician community with multiple sites in the Boston area. Also partnered with RxHub and SureScripts. Focused on application of e-prescribing standards in mature practices. Assessed standards impact on medication errors.

C. RAND Corporation Test of Medicare s Initial Electronic Prescribing Standards in the New Jersey E-Prescribing Action Coalition Principal Investigator: Douglas S. Bell, RAND Research Scientist, and Assistant Professor of Medicine, University of California at Los Angeles School of Medicine A collaborative effort of RAND, Horizon Blue Cross/Blue Shield of New Jersey (BCBSNJ) and the pharmaceutical benefits management (PBM) company Caremark Rx. Focused on New Jersey physicians in the Horizon E-prescribing Program who used iscribe, either on handheld personal digital assistants (PDAs) or through a web browser. Also partnered with Caremark s mail-order pharmacy and Walgreens retail pharmacy, and data exchanges and hubs, RxHub and SureScripts. D. SureScripts, LLC Maximizing the Effectiveness of E-prescribing Between Physicians and Community Pharmacies Principal Investigator: Ken Whittemore Jr., R.Ph., M.B.A., Vice President, Professional and Regulatory Affairs, SureScripts; Kate Lapane, Associate Professor, Community Health, Brown University SureScripts, the nation s largest provider of electronic prescribing networking and certification services, partnered with several organizations and academic institutions including Brown University and Midwestern University; the Chain Pharmacy Advisory Council; the Independent Pharmacy Advisory Council; AllScripts; MedPlus/Quest Diagnostics; DrFirst; and Zix Corp. Implemented e-prescribing systems in multiple geographies and clinical practice settings in Florida, Massachusetts, Nevada, New Jersey, and Tennessee. Diversity of stakeholders involved in SureScripts pilot site was one of its most defining aspects. Conducted end-to-end testing of standards within their integrated e-prescribing system, and pharmacy workflow. E. University Hospitals Health System A Practice-Based Pilot Site Test of Emerging E-prescribing Standards Principal Investigator: Robert Elson, M.D., M.S., Project Manager, UPCP- Ohio KePRO CMS E-Rx Pilot Site University Primary and Specialty Care Practices (UPCP)-based pilot site of 300 primary and specialty care physicians in northeast Ohio. Collaborated with NDC Health; University Hospitals owned health plan, QualChoice; Aetna Insurance Company; and Ohio KePro, the state s quality improvement organization (QIO); The University of Minnesota Division of Health Services Research; Medical Group Management Association (MGMA) Center for Research; RxHub and SureScripts. Focused on e-prescribing in small practices (2-3 physicians) and impact of standards on workflow and practice cultures. 16

SECTION III EVALUATION 1. Evaluation Contractor As AHRQ has significant health IT evaluation expertise among program staff and existing contractors, including AHRQ's National Resource Center for Health Information Technology (NRC), it chose the NRC to perform the evaluation of CMS e-prescribing pilot project. The NRC has existing resources with excellent evaluation and e-prescribing expertise, including resources from the National Opinion Research Center (NORC), Vanderbilt University, Partners Healthcare, and others. 2. Evaluation Objectives The AHRQ/NRC evaluation team was charged with making informed recommendations regarding initial standards functionality, interoperability with foundation standards, and their impact on workflow, clinical, and other outcomes. Specifically, the primary objectives of the evaluation were to: 1) systematically collect and interpret the evidence (e.g., testing methods and findings) reported by e-prescribing grantees/contractor; 2) determine which initial standards were functional (and those which were not); 3) document the benefits, challenges, and technical considerations for mass implementation of the initial standards in different settings; and 4) interpret the impacts that e-prescribing has on various health care settings. This section describes the methods followed by the AHRQ/NRC staff and consultants to carry out these tasks. 3. Research Questions The AHRQ/NRC evaluation team identified key questions for each of the evaluation components, including both the functionality of the standards as well as their outcomes and likely impacts. A. Functionality. In evaluating the functionality of the standards, the AHRQ/NRC evaluation team employed the same key question provided initially as guidance to grantees/contractor as they prepared their RFAs: Did the standards allow participants to effectively and unequivocally communicate the necessary information between all participants in the transaction, such as the pharmacy, pharmacy benefits manager (PBM), router, plan and prescriber? B. Outcomes and Impacts. In addition to testing the basic functionality of the standards, pilot sites were evaluated on a wide variety of outcomes, including: Does e-prescribing affect the number of medication errors and adverse drug events? Does e-prescribing improve workflow in prescriber offices (fewer interactions with pharmacies, freeing up support staff time for other functions, more time available for patient interaction)? What are the uptake and dropout rates among prescribers? Does e-prescribing affect patient satisfaction? 17

4. Data Collection Activities The AHRQ/NRC evaluation team systematically collected both qualitative and quantitative data from various sources. Qualitative data were collected through: 1) semistructured interviews with grantee/contractor staff, 2) observational site visits to grantees/contractor using a tailored protocol, and 3) unstructured interviews with key informants. Quantitative data (collected by the grantees/contractor themselves) included technical testing results which measured the functionality and interoperability of foundation and initial standards, and findings from the various evaluations which investigated different impacts and e-prescribing outcomes. These data were collected by reviewing grantee/contractor documents including the proposals, presentations, and progress and final reports. A. Review of Grantee/Contractor Documents. The AHRQ/NRC evaluation team reviewed various grantee/contractor documents including grant/project proposals, quarterly progress reports, final project reports, and all publications and presentations produced during the grant/contract period. The objective was to collect information on their testing of the initial standards, note any proposal changes, and assess testing and evaluation methods. The document reviews also served as an information source for site-specific questions for the site visit protocol. B. Structured Telephone Calls with Key Grantee/Contractor Staff. Prior to the site visits, the AHRQ/NRC evaluation team contacted key grantee/contractor staff (e.g., the Principal Investigators, evaluator, project coordinator, etc.) to discuss their pilot sites and help them to prepare for the upcoming site visit by reviewing overall objectives and expectations. Grantees/contractor provided a project status update and any preliminary or final results. These calls finalized the site visit arrangements and agenda, and lasted 45-60 minutes each. C. Grantee/Contractor Site Visits. The evaluation team conducted one-day visits to all e-prescribing grantees/contractor to: 1) collect test and evaluation data not yet reported; 2) document barriers and challenges to standards implementation and testing; 3) collect information to assess testing methods and evaluation approaches; and 4) discuss preliminary findings from grantees /contractor s data analyses. Site visits were conducted by evaluation team members and consultants based upon the site visit protocol (Appendix A). D. Key Informant Interviews. The AHRQ/NRC evaluation team also conducted telephone interviews with key informants. These calls were made following completion of all site visits and validated the information learned during those visits. Key informants included individuals with industry experience working with various aspects of e-prescribing, including prescribers, dispensers (e.g., pharmacy staff), software vendors, and individuals who have developed and evaluated e-prescribing programs and applications. 5. Data Analysis The evaluation team used information from each of the three following categories to help inform CMS recommendations regarding the overall functionality of initial standards: 1) grantee/contractor characteristics; 2) standards testing and evaluation results; and 3) assessment of grantee/contractor testing and evaluation methods. By reviewing the findings across all three areas, the evaluation team was able to assess grantee/contractor results within the context of the settings and methods within which the testing occurred. This allowed the evaluation team to reach informed conclusions on how each grantee/contractor result should be used in developing recommendations for CMS. 18

SECTION IV EVALUATION FINDINGS 1. Pilot Testing of the Standards Each grantee/contractor tested different combinations of foundation and initial standards as outlined in Exhibit 4. Each of the initial standards was tested by four or five of the pilot sites. However, the type of testing varied from site to site. Exhibit 4. Summary of Standards Tested and Methodology by Pilot Site BRIGHAM & WOMEN S OHIO KePRO RAND SURESCRIPTS ACHIEVE Initial Standards Medication History No Yes-live Yes-live Yes-live Yes-live Formulary & Benefits Yes-live Yes-live Yes-live Yes-live Yes-live SCRIPT Fill Status Yes-live Yes-evaluate only Yes-live Yes-live Yes-live Prior Authorization Yes-live Yes-lab Yes-live Yes-live No Structured & Codified SIG No Yes-lab Yes-lab Yes-lab Yes-lab RxNorm No Yes-lab Yes-lab Yes-lab Yes-lab Foundation Standards NCPDP Telecom Yes-live No No No Yes-live ANSI X12N 270/271 Yes-live Yes-live Yes-live No Yes-live NCPDP SCRIPT: New, Refill, Change, Cancel, Renew, etc. Yes-live Yes-evaluate only No Yes-live Yes-live In instances where enough transaction volume was expected, pilot sites tested some standards in a live environment, with prescribers generating an electronic prescription and transmitting that prescription electronically to a pharmacy. For example, the medication history, formulary and benefits, and prior authorization standards were tested predominantly in this way. In other instances where live experience volumes were expected to be insufficient to generate statistically meaningful results, some pilot sites evaluated standards in a lab environment using presentations to expert panels, workgroups, interview and survey techniques, as well as other tools for analyzing the adequacy of the standard s content and usability. For example, the structured and codified SIG standard and the RxNorm standard were tested exclusively in this way. Another factor in determining if an initial standard is ready for mass implementation is whether it is interoperable with foundation standards. One pilot project objective was to determine in which settings the initial standards interoperate (or do not interoperate) with foundation standards. Evaluation staff collected information from grantees on whether any modifications (either to the initial or foundation standards) were required in order to make them interoperable. A distinction was made between an initial standard s limitations which were attributed to the standard itself, and those which could be attributed to implementation issues. In the latter case, specific implementation challenges were documented and described. Ohio KePro did not specifically test and report on Formulary & Benefits, Eligibility, New Rx or Renewals, but these were transactions that took place with their participants. E-prescribing had been in place with their practices long before the pilot project began. The variable of interest was the influence of e-prescribing of drugs on costs and quality of care. 19

The foundation standards were included in the majority of pilot sites, even though they are not initial standards that required testing under the MMA. The purpose of including these standards was to ensure initial standards could interoperate with the foundation standards. As shown in Exhibit 4, pilot sites reported on which standards they tested (yes) and those standards they did not test (no). The testing method used by one of the pilot sites, evaluate only represents mapping of the structure and content of the initial standards to the foundation standards to identify potential interoperability issues. In almost all cases, the three foundation standards, NCPDP Telecommunication 1.0, the NCPDP SCRIPT standard Version 5.0, as updated by Version 8.1, and the ANSI X12N 270/271 demonstrated their interoperability with each of the respective initial standards. The only exception was in the long-term care setting as detailed below. 2. Results and Analysis of Standards Testing A. Formulary & Benefits The Formulary & Benefits standard, NCPDP Formulary & Benefits Standard Version 1.0, is intended to provide prescribers with information about a patient s drug coverage at the point of care. The data standard must provide a uniform way for pharmacy benefit payers (including health plans and PBMs) to communicate a range of formulary and benefit information to prescribers via point-of-care (POC) systems. The standard covers a range of data, including 1) general formulary data (for example, therapeutic classes and subclasses); 2) formulary status of individual drugs (i.e., which drugs are covered); 3) preferred alternatives (including, but not limited to restrictions that may impact if a drug will be covered, such as quantity limits and prior authorization); and 4) co-payment (not just the single co-payment for the drug being considered, but the co-payments for one drug versus another). The standard s goal is to provide this information to the prescriber during the prescribing process so that he/she can make the most appropriate drug choice for the patient without extensive back-and-forth administrative activities with the pharmacy or the health plan. This NCPDP Formulary and Benefits Standard Version 1.0 was implemented live in all pilot sites where technology vendors were certified prior to production. This standard works in tandem with the eligibility request and response (ASC X12N 270/271). Once the individual is identified, the appropriate drug benefit coverage is located and transmitted to the requestor. Analysis Overall, the pilot project demonstrated that the commonly used parts of the NCPDP Formulary and Benefits standard have been successfully implemented among a variety of e- prescribing partners, and that it may deliver value in approximating patients drug coverage. While complex, it has been clearly demonstrated that the standard can technically support the transaction, and that it is ready for implementation under Part D. However, as with all standards, the pilot project identified implementation issues that must be addressed in order to achieve the potential benefits, the most important of which is that systems must be able to match patients to health plans, or the formulary and benefits data will not be available. The industry may need to further specify how the standard should be used and how it should evolve based on additional research and development. 20